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Liz Truss admits talks with US on free trade deal will not resume for years

·4-min read
Liz Truss admits talks with US on free trade deal will not resume for years

Liz Truss has conceded that negotiations for a post-Brexit free trade deal with the US will not restart for years as she flew to New York ahead of a meeting with Joe Biden.

The Prime Minister stressed her trade priority is striking agreements with India and the Gulf states, and joining a trade pact with nations including Australia and Japan.

But she heavily downplayed the chances of talks even resuming to get the comprehensive deal with the States that was billed by Brexit backers as a major benefit of leaving the EU during the referendum.

Labour said the admission is “terrible news” for the UK economy, arguing the lack of a deal is costing billions in lost trade and holding back growth.

Ms Truss, a former Brexit opponent who has switched to becoming a supporter, said the deals with Delhi and other allies are “our trade priorities” ahead of talks with the US president at a United Nations summit on Wednesday.

“There aren’t currently any negotiations taking place with the US and I don’t have an expectation that those are going to start in the short to medium term,” she told reporters flying with her to New York.

Officials did not deny that Ms Truss was effectively conceding it will be years before talks with the White House resume.

Mr Biden has stalled on trade negotiations and, vocally proud of his Irish heritage, has raised concerns about the impact of Brexit and the Northern Ireland Protocol on the peace process.

The next presidential election is in 2024 and the more trade-focused Donald Trump may run again for the Republicans.

When Boris Johnson last visited the US as prime minister, Mr Biden downplayed the chances of a deal with the UK as he warned against tampering with the “Irish accords” amid a row over the post-Brexit protocol.

Ms Truss named among her priorities the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), one of the world’s largest trading blocs which includes Australia, Canada and Japan.

The other she cited is the Gulf Co-operation Council, which includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, and is the EU’s sixth largest export market.

Mr Johnson and Indian Prime Minister Narendra Modi set a deadline for striking a deal by Diwali, the Hindu celebration being held on October 23.

Boris Johnson visit to India
Boris Johnson with Indian PM Narendra Modi (Ben Stansall/PA)

So far the UK and the US have been striking smaller state-by-state agreements, with Britain signing deals with Indiana and North Carolina.

But these are far less ambitious than the comprehensive free trade deal touted by Brexit supporters during the 2016 referendum.

Nigel Farage was among those to dismiss a warning from then-President Barack Obama that the UK could end up at the “back of the queue” for a trade deal, with the then-Ukip leader suggesting in April 2016 that a trade deal was in “both countries’ interests”.

In January 2017, Mr Johnson as Foreign Secretary also suggested that the UK would be “first in line” for a free trade deal with the incoming Trump administration.

One of the issues facing future talks is Ms Truss’s threat to override parts of the Northern Ireland Protocol, which the EU says would break international law.

Senior figures in Mr Biden’s Democratic party have warned a trade deal could be jeopardised by the UK single-handedly tearing up the agreement, which was part of the Brexit divorce deal.

Nick Thomas-Symonds, Labour’s shadow international trade secretary, said: “The admission that there is no prospect of a trade deal with the USA is terrible news for the UK economy – it is costing billions in lost potential trade opportunities and holding back growth.

“There is no doubt that the blame for this mess lies at the door of the Prime Minister, who tarnished the UK’s international reputation as Foreign and International Trade Secretary. This is an embarrassment for Liz Truss.”

While in New York, Ms Truss is also set to have talks with French President Emmanuel Macron and the EU’s Ursula von der Leyen, which are bound to prominently feature Brexit.

Britain Royals Funeral
Joe Biden (James Manning/AP)

Ms Truss will meet Mr Macron on Tuesday, before seeing Mr Biden and Ms von der Leyen on Wednesday. She had been set to talk to the US President in Britain over the weekend as he visited for the Queen’s funeral, but the meeting was postponed.

On Tuesday, Cabinet minister Michelle Donelan played down any suggestion that the UK’s handling of the protocol was playing a role in the delay in securing a deal.

Appearing on Times Radio, she said the protocol has “nothing to do” with the lack of substantive trade talks, adding that the UK has a “strong relationship” with the US.

The Liberal Democrats blamed Ms Truss’s “cack-handed diplomacy” for the failure to secure a trade deal.

“Any competent political party would have made sure the trade and then foreign secretary responsible for this series of failures would be held responsible. Instead, the Conservatives have made her Prime Minister,” foreign affairs spokesperson Layla Moran said.